US steps up Cuba cooperation after Gulf oil spill

*US decision reversed after BP oil leak

*Cuba expected to begin deepwater drilling

*Risk of accident seen in Cuban waters

By Anthony Boadle

WASHINGTON, May 26 The U.S. government has
licensed a Houston-based oil drilling group to travel to Cuba
to start cooperation on safety and environmental practices
following the Gulf of Mexico oil spill.

The International Association of Drilling Contractors
(IADC) said on Wednesday the Obama administration denied it
permission to travel to Cuba in December, but reversed the
decision apparently due to the attention the BP Plc (BP.L) well
blowout brought to the potential for an environmental
catastrophe.

"The license was granted, curiously, just after the spill
in the United States," said IADC Executive Vice President Brian
Petty. "We are pleased the government has relented."

The IADC is waiting for Cuba to set a date for a visit by a
delegation of five of its staff to enhance Cuban awareness of
global standards in the prevention of accidents, safety
procedures and environmental protection, Petty said.

The delegation would discuss the prospect of deepwater
drilling offshore Cuba, the IADC.

It would be the first time a U.S. oil industry delegation
visits the communist-run country which has no diplomatic ties
to Washington and is under a trade embargo enforced after Fidel
Castro's revolution five decades ago.

The IADC's members own most of the world's land-based and
off-shore drilling rigs and are mostly U.S. companies.

U.S. and Cuban diplomats have begun working-level talks on
the risks from the huge Gulf of Mexico oil spill that could be
carried to Cuban shores by strong currents. [ID:nN19218031]

The oil gushing from a blown-out seabed well owned by BP in
U.S. waters already has affected some parts of the U.S. Gulf
Coast shoreline in what officials fear will inflict an
ecological and economic catastrophe.

Oceanographers are predicting that a powerful ocean flow
known as the Loop Current could carry some of the oil southeast
through the Florida Straits and threaten the coast of northwest
Cuba, where the island's top beach resorts are located.

CUBAN EXPLORATION

Although the oil that could threaten Cuba is gushing from a
well in U.S. waters, experts say there is the same risk of an
accident in Cuba's plans to move forward with deepwater
exploration drilling in its Gulf of Mexico waters.

"It is highly likely that we will see drilling in Cuban
waters later this year," oil expert Jorge Pinon said at a
discussion of U.S.-Cuba engagement in the Gulf of Mexico at the
New America Foundation, a Washington think tank.

Spanish oil giant Repsol YPF (REP.MC) REP.N, which found
light oil in Cuban deepwaters in 2004, has contracted an
Italian-owned, Chinese-built rig that is expected to drill a
second exploratory well by year's end. [ID:nN05129084]

Several international oil companies have signed risk
contracts to explore for oil in Cuba's Gulf waters, including
companies from Brazil, Malaysia, Vietnam and Venezuela.
Norway's Statoil (STL.OL) (STO.N) and a unit of India's Oil and
Natural Gas Corp (ONGC.BO) have joined Repsol's venture.

At a conservative estimate, there could be 4.6 billion
barrels of undiscovered oil in the Cuban waters of the Gulf,
according to the U.S. Geological Survey.

The general assumption in the oil industry is that the
restriction of the use of U.S. deepwater technology under
Washington's trade embargo has delayed exploration of Cuba's
oil and gas potential in the Gulf.

But oil experts and environmentalists say it is time to
allow full cooperation with Cuba in oil safety practices so
that U.S. technology to be quickly mobilized in the case of an
accident as serious as the Macondo well blowout.

"We are not talking about a transfer of technology. All we
are asking is that, if there is an accident, the Cubans can
pick up the phone and call American experts who can bring
resources within 24 hours," Pinon said. "The flexibility must
be there."
(Reporting by Anthony Boadle, editing by Cynthia Osterman)

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